Shop prices inched higher in June, food prices to fall

INFLATION in shop prices rose only modestly in June and at a slower rate than in May, according to the British Retail Consortium-Nielsen’s shop price inflation index released today.

Prices rose by 0.7 per cent in June compared with the same period last year and was held up by food inflation of 5.6 per cent last month. Non-food products saw annual deflation of 1.9 per cent, more than was experienced in May.

But annual food inflation is now at its lowest level for 14 months and it is expected to fall further this year, especially given last year’s highs when commodity prices such as wheat and rice were at record levels.

Non-food deflation was driven by increasing falls in price of electrical, clothing and footwear and furniture goods.